Video chips lead to record-setting sales

Article Excerpt

NVIDIA CORP. $37 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 544.6 million; Market cap: $20.2 billion; Price-to-sales ratio: 3.9; Dividend yield: 1.2%; TSINetwork Rating: Average; www.nvidia .com) is a leading designer of 3D-capable video chips, which help video games run more smoothly and appear more lifelike. In the fiscal year ended January 31, 2016, Nvidia’s revenue rose 7.0%, to a record $5.0 billion from $4.7 billion a year earlier. Sales of its graphic video chips (84% of the total revenue) gained 9.1%. That’s because Nvidia is doing a good job developing chips for virtual reality devices, self-driving cars and data centres. However, sales of its Tegra chips for mobile devices (11%) fell 3.5%. Licensing revenues (5%) were flat. Nvidia earned $929 million in fiscal 2016. That’s up 16.0% from $801 million a year earlier. Per-share profits rose 17.6%, to $1.67 from $1.42, on fewer shares outstanding. Thanks partly to Nvidia’s share buybacks, the stock has…